Too Big to Save? How to Fix the U.S. Financial System


Praise for Too Big to Save?

"When Bob Pozen talks, people listen—with good reason. This book is full of wisdom about the flaws in our financial system that let the crisis develop and, more important, detailed prescriptions for fixing it. Read it. Then keep it on your desk as a reference."
—Alan S. Blinder, former vice chairman, Federal Reserve Board, and Gordon S. Rentschler Memorial Professor of Economics and Public Affairs, Princeton University

"In an era of specialized books about the financial crisis, Bob Pozen's is a sparkling exception. In plain English, he explains to the intelligent reader how we got into this financial mess, assesses steps taken by government, and prescribes practical ways to prevent a future crisis. Bob Pozen is one of the nation's most thoughtful and responsible financial leaders. If you are looking for one book to sort out the financial crisis, start here!"
—David Gergen, Professor, Harvard Kennedy School, and Senior Political Analyst, CNN

"This book is not only a detailed yet thoroughly lucid and accessible study of the financial crisis; it is also, and more important, the best critique I have seen of the government's responses to the crisis and its recent blueprint for financial regulatory reform."
—Richard A. Posner, U.S. Circuit Judge and author of A Failure of Capitalism: The Crisis of '08 and the Descent into Depression

Expert insights on the future of U.S. finance

Bob Pozen not only identifies the multiple factors causing the financial crisis, but also evaluates the governmental responses so far to this crisis and suggests what actions should be taken to prevent future crises. He focuses on four issues:

  • Why revival of the loan securitization process isimportant to the American recovery
  • How the Treasury should decide which financialinstitutions should be recapitalized
  • Why mega banks need a much smaller and strongerboard of directors
  • How the monitoring of systemic risks should be integratedwith an enhanced system of financial regulation

Robert Pozen is Chairman of MFS Investment Management®, which manages over $150 billion in assets for individual and institutional investors. He currently is a senior lecturer at the Harvard Business School and was chairman of the SEC advisory committee on improving financial reporting, 2007 through 2008. In 2001 and 2002, Pozen served on President Bush's Commission to Strengthen Social Security. In 2003, he served as Secretary of Economic Affairs for Massachusetts Governor Mitt Romney. Pozen was also formerly vice chairman of Fidelity Investments and president of Fidelity Management & Research Company. He has published a broad variety of articles in the Wall Street Journal, the New York Times, and the Financial Times of London.


The Financial Crisis: A Parable.

Part I: The United States Housing Slump and the Global Financial Crisis.

Chapter 1 The Rise and Fall of U.S. Housing Prices.

Chapter 2 Fannie and Freddie.

Chapter 3 Mortgage Securitization in the Private Sector.

Chapter 4 Credit Default Swaps and Mathematical Models.

Part II: Impact on Stock and Bond Markets.

Chapter 5 Short Selling, Hedge Funds and Leverage.

Chapter 6 Capital Requirements at Brokers and Banks.

Chapter 7 Impact on Short-Term Lending.

Chapter 8 Insuring Deposits and Money Market Funds.

Part III: Evaluating the Bailout Act of 2008.

Chapter 9 Why and How Treasury Recapitalized So Many Banks.

Chapter 10 Increasing Lending Volumes and Removing Toxic Assets.

Chapter 11 Limiting Executive Compensation and Improving Boards of Directors.

Chapter 12 Were Accounting Rules an Important Factor Contributing to the Financial Crisis?

Part IV: The Future of the American Financial System.

Chapter 13 The International Implications of the Financial Crisis for the United States.

Chapter 14 The New Structure of U.S. Financial Regulation.



About the Author.